Chicago Grains End Lower In Turnaround Tuesday Style
20/05/14 -- Soycomplex: Beans closed lower in Turnaround Tuesday style, with funds estimated as being a net seller of around 3-5,000 contracts on the day. Rumour has it that China is still having problems opening up Letters of Credit to pay for South American soybean cargoes. The Chinese government sold more than 80% of the 300 TMT of soybeans offered up for auction today. Oil World estimated the global 2013/14 oilseeds crop at 487.5 MMT versus a previous forecast of 483.5 MMT and 457.8 MMT last season. They pegged the world soybean crop at 280.0 MMT versus 280.6 MMT previously and 267.4 MMT in 2012/13. They see world soybean ending stocks in 2013/14 at 73.1 MMT versus 78.2 MMT previously and 63.1 MMT in 2012/13. They didn't give a figure for the coming season, but other analysts see 2014/15 soybean carryout rising further to around 80-82 MMT. The predicted El Nino weather event for summer 2014 would normally be beneficial to US soybean production. Dr Cordonnier estimated 2014 US soybean yields at 44.5 bu/acre, fine tuning it from a previous estimate of 44.0-45.0 bu/acre. He estimates production at a record 3.62 billion bushels, which is around 98.5 MMT, some 9 MMT higher than in 2013. He left both his Brazilian and Argentine 2013/14 production estimates unchanged at 86.5 MMT and 55 MMT respectively. Brazil's IMEA estimated the Mato Grosso 2014/15 soybean planted area at 8.67 million hectares versus 8.35 million in 2013/14. They see output in Brazil's largest producing state at 27.31 MMT versus a 2013/14 estimate of 26.04 MMT. The USDA announced 110,000 MT of optional origin beans sold to China for 2014/15 shipment. The combination of improved US yields, on the back of record plantings, followed by an increase in sowings in Brazil for 2014/15 equals a lot of bearish factors stacked against higher soybean prices in the months ahead. We will however undoubtedly get the usual weather market at some point across the summer. Jul 14 Soybeans closed at $14.69 3/4, down 15 1/2 cents; Aug 14 Soybeans closed at $14.05 1/4, down 14 1/2 cents; Jul 14 Soybean Meal closed at $486.70, down $3.80; Jul 14 Soybean Oil closed at 40.07, down 35 points.
Corn: The corn market finished around 3-4 cents lower. Fund money was judged as being a net seller of around 4,000 corn contracts on the day. Last night's USDA planting progress report revealed that growers have now pretty much caught up with the average pace for this time of year, and in some key states like Illinois and Indiana are actually ahead of normal. Dr Cordonnier estimated the US corn yield at 162.0 bu/acre, down from a previous estimate of 163-165 bu/acre, although up on 158.8 bu/acre last year. He pegs the 2014 US corn crop at 13.66 billion bushels. He left his 2013/14 Brazilian corn crop estimate unchanged at 73.5 MMT, along with Argentina's at 24.0 MMT. South Korea's MFG bought 198,000 tons of optional origin corn for Nov-Dec shipment. Russian corn planting is said to be around 86% complete, with Ukraine at around 90% done. There are some suggesting that Ukraine may not plant much more than what is already in the ground due to credit problems. There's also some talk of heat and dryness being an issue in large parts of Russia. The very heavy rains of last autumn that cut winter plantings back in Russia however means that sub soil moisture levels are still good, although surface moisture levels are getting a bit thin in places, I am told. For now it doesn't seem to be a problem, although it's a situation that certainly merits monitoring given what drought in the region has done to the grain markets in some recent years. Corn planting in France and Germany is well advanced compared to 12 months ago. On the weather front in the US "strong warming is predicted in the week ahead with abundant sunshine, improving planting conditions. Last week was cold in the Midwest with temperatures 5-6 F below average. Less rain is also predicted, encouraging drying. Strong warming and drying in the Midwest is evidence of a fundamental shift in the weather pattern. A warm ridge of high pressure would replace a cold trough previously," said Martell Crop Projections. Jul 14 Corn closed at $4.73 1/2, down 3 3/4 cents; Sep 14 Corn closed at $4.72 1/4, down 3 1/4 cents.
Wheat: The wheat market closed lower, ultimately failing in an attempt to rally, having traded higher for much of the morning. Fund money was estimated as being a net seller of around 2,000 Chicago wheat contracts on the day. US weather conditions on the Plains are seen turning wetter, although this moisture may come too late to be of much benefit to winter wheat. "Drought stressed wheat in Oklahoma and Texas are expecting a drenching rain, at least 1.5 inch but up to 3-4 inches. Kansas is expecting .50-1.25 inches. This would be the wettest week since September 2013 in Southern Plains wheat. Wheat would not benefit much from late spring rainfall as wheat development is well advanced. Kansas wheat is 70% heading, while Oklahoma and Texas heading has reached 90-95%. Heavy rainfall may increase kernel weights, stabilising the yield though strong improvement is not expected. Hard red wheat conditions worsened to a season low on May 18, 22% good-excellent, 27% fair and 51% poor-very poor," said Martell Crop Projections. SovEcon estimated Russia’s 2014 grain crop at 90.0 MMT versus a previous estimate of 88.0 MMT due to additional supplies from Crimea. Production in 2013 (excluding Crimea) was 92.4 MMT. They see wheat output this year at 50.0 MMT versus 52.1 MMT in 2013/14. Russia’s 2014/15 wheat exports were estimated at 17.5 MMT versus a 2013/14 estimate of 18.3 MMT. Japan is feeding less wheat as corn prices have regained their more normal discount. Japan’s Ag Ministry said that the use of wheat in animal feed in March was 2.5% versus 2.7% a month previously and 3.6% in March 2013. Corn usage in feed meanwhile has increased to 46.2% versus 46% in February and 42.2% in March 2013. Japan are staging their regular weekly tender, this time looking for 97,372 MT of food wheat for June–July shipment of a mixture of US, Australian and Canadian origin. Jul 14 CBOT Wheat closed at $6.70 1/2, down 4 cents; Jul 14 KCBT Wheat closed at $7.68 1/4, down 1/2 cent; Jul 14 MGEX Wheat closed at $7.38 1/4, down 1/2 cent.